Pew Charitable Trusts have indicated that 12 of the largest U.S. banks have amended online credit card offers based on standards of current legislation governing the practices of the credit card issuers.

The Philadelphia based nonprofit organization have shown that these banks have ceased the increase of interest rates on existing balances and the practice of applying payments to balances with the lowest interest rates.  The study involved 450 different cards and compared the terms and conditions for the cards offered in March 2010 and July 2009.

The changes are the direct result of the passing of the Credit Card Accountability Responsibility and Disclosure act.  Limiting rate increases and requiring banks to apply payments to higher rate balances are some of the key focuses of the bill.  Many of the rules took effect in February 22.  Others, such as eliminating unwarranted late payment fees, will take effect on August 22.

Direct of Pew’s Safe Credit Cards Project, Nick Bourke said, “The good news is the market is much more transparent now and lots of the practices deemed harmful to consumers have gone away.” “There are still challenges.”

On the downside, the report has also shown that penalty rates for missed payments remains fairly high.  The average penalty rate increased one percent to 29.99 percent.  Many card issuers remain secretive in releasing their penalty rates and disclosing the probable reasons for rate increases.  Nor do many indicate the methods to which a credit card interest rate can be lowered to its original APR.  

Bank of American spokeswoman, Betty Riess commented, “We review customers who are 60 days past due on a case-by case-basis to determine if it is appropriate to re-price the account.” “We don’t have an automatic trigger.”  She also added, “Customers are notified if their rate will increase and what it will be, and they have the opportunity to opt out and close the account.”

Fees associated with cash advances and balance transfers also increased 1 percent from 3 percent.  Credit cards with an annual fee fell slightly from 15 percent in July 2009 to 14 percent.  The average annual fee for these cards increased from $50 to $59.

Bourke commented, “The challenge will continue to be maintaining the transparency that the card legislation was all about as the market evolves.”